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Chris Kacher & Gil Morales Managing Directors MoKa Investors, LLC
www.mokainvestors.com www.selfishinvesting.com
Trader’s Expo 2011 Bally’s Las Vegas
November 18, 2011
Chart Notes Moving Averages:
Magenta = 10-day simple moving average.
Green = 20-day simple moving average.
Blue = 50-day simple moving average.
Black = 65-day exponential moving average.
All charts courtesy of
HighGrowthStock Investor and
eSignal, Inc.
The Golden Rules of Short-Selling • Short only during clear bear market trends and as close to
the beginning of the bear market trend as possible. • What goes up must come down: focus on the big upside
leaders from the prior bull market trend as your primary short-sale target stocks.
• Some stocks will break sharply off of their peaks, presenting short-term short-sale opportunities, and then usually will take 8-12 weeks, sometimes longer, to fill out bearish formations and continue lower during an overall bear market.
• Trade stocks that are very liquid. • Set tight stops of 3-5%. • Set profit projections for your initial short-sale position.
Short-Sale Set-Ups
• Three basic formations, although some can overlap or and/or metamorphose (“morph”) into one-another.
• Head & Shoulders Top (H&S) formation – the classic topping formation taught in all technical analysis manuals.
• Late-Stage Failed Base (LSFB) – when breakouts become too obvious.
• Punchbowls of Death (PODs) – Straight down and straight up, and then straight down to new lows.
Head & Shoulders Top Formation
Finisar Corp. (FNSR) – 2011
Crocs, Inc. (CROX) - 2007
Freeport-McMoran Copper & Gold (FCX) – 2008
Potash Corp. (POT) - 2008
Netflix, Inc. (NFLX) - 2011
Green Mountain Coffee Roasters, Inc. (GMCR)
Late-Stage Failed-Base Top Formation
Qualcomm, Inc. (QCOM) 2000
Yahoo! Inc. (YHOO) - 2000
Oracle Corp. (ORCL) - 2000
Travelzoo, Inc. (TZOO) - 2011
Riverbed Technology, Inc.(RVBD) - 2011
Research in Motion, Ltd. (RIMM) - 2008
Sunpower Corporation (SPWRA) – 2007-2008
Punchbowl of Death Top Formation
Charles Schwab & Co. (SCHW) 2000
America Online (AOL) - 2000
Amazon.com (AMZN) 1999
Taser International, Inc. (TASR) – 2004-2005
Dryships, Inc. (DRYS) - 2008
TBS International, Ltd. (TBSI)
LDK Solar Co., Ltd. (LDK) – 2007-2008
Verisign, Inc. (VRSN) - 2000
Broadcom Corp. (BRCM) - 2000
First Solar, Inc. (FSLR) - 2007
Short-Selling Mechanics
NASDAQ Composite Index – 2007 thru 2008
Crocs, Inc. (CROX) - 2007
Crocs, Inc. (CROX) - 2007
Dryships, Inc. (DRYS) – 2007-2008
Dryships, Inc. (DRYS) – 2007-2008
NASDAQ Composite Index – 2011
Finisar Corp. (FNSR) – 2011
Finisar Corp. (FNSR) – 2011
Netflix, Inc. (NFLX) - 2011
Netflix, Inc. (NFLX) - 2011
F5 Networks, Inc. (FFIV) - 2011
F5 Networks, Inc. (FFIV) - 2011
Aruba Networks, Inc. (ARUN) - 2011
Aruba Networks, Inc. (ARUN) - 2011
Travelzoo, Inc. (TZOO) - 2011
Travelzoo, Inc. (TZOO) - 2011
Green Mountain Coffee Roasters, Inc. (GMCR)
NASDAQ Composite Index – 2010 Summer Correction
Research in Motion (RIMM) - 2010
Research in Motion (RIMM) - 2010
U.S. Steel (X) - 2010
U.S. Steel (X) - 2010
Freeport McMoran Copper & Gold (FCX) - 2010
Freeport McMoran Copper & Gold (FCX) - 2010
